Food ProcessingAG BM 102

Introduction

• Adds value to farm production

• Creates products consumers want

• Employs lots of people ~ 90,000 in PA

An Overview

• Products

• Location

• Competition

• Issues

Meat

• Large Animal slaughter – a few plants

• Processed meats – lots of plants

• Poultry – several big plants

• A lot of consolidation going on – mergers across species – Tyson bought IBP

Boxed Beef

Seltzer’s Lebanon Bologna

Chicken Plant

Dairy

• Milk

• Cheese

• Ice cream

• Butter powder

Ritchey’s Dairy Ice Cream

Land O’Lakes Butter/Powder Milk Plant

Farmstead Cheese

Fruits & Vegetables

• Canned (Furman’s)

• Dried

• Pickles, sauces etc. (Heinz)

• Frozen (Hanover)

Grain

• Flour

• Cereal

• Pet Food

• Animal feed

Brown’s Flour Mill

Rollstands

Sifter

Flour Trailer on Scale

Bakery

• Bread

• Cookies & crackers

Candy

• Chocolate

• Other candy

• Gum

• PA largest candy producing state – Hershey and many more firms

Fats and Oils

• Animal

• Vegetable

• Very little in PA

Beverages

• Beer

• Wine

• Soft Drinks

• About half the jobs beer and half soft drinks – a little wine

• Produce near consumer

Other Food

• Coffee

• Ice

• Fish

• Pasta

• Pretzels & snack foods (PA biggest in this)

• Other stuff– Fastest growing category – new products

Primary Reason for Plant Location in Pennsylvania

Consumer34%

Other34%

Both6%

Farm26%

Traditional Issues

• Efficiency

• Competitiveness

• Demand

• New products

• New Technology

Newer Issues

• Farm inputs

• Labor

• Water

• Solid waste

• Waste water

• Food safety

How many Food Companies will we have?

• Market growing slowly

• Lots of mergers – a long-term trend

• Is Hershey too small to be independent?

• Heinz?

• Campbell’s?

• Food conglomerates common

Concluding Comments

• Key provider of consumer satisfaction

• Big recipient of food dollars

• Important to PA

• Big employer of PSU grads

• Works closely with suppliers & customers to do their job better